Life Insurance Agencies Should Be Bold With Their Technology
Greg Large (CLU®, ChFC®, CLTC)
President, Lenox Advisors
The job of a General Agent has never been an easy one. Growing the client base, attracting new advisor talent, managing new business, marketing and advertising, all need to be done while delivering on a promise of pristine client service. Ask any successful GA what drove their success over the years, and they will likely answer with a combination of relationships, instincts, and old-fashioned sweat equity.
Today, however, competition and regulation are pushing the industry to a new inflection point, where effort and instinct no longer guarantee success. Fees are contracting, while policies and regulations are becoming more complex. Agents are under pressure to maintain larger and larger client bases to achieve the same goals, leading to higher attrition rates. And agencies often find themselves spending more time fighting technology than getting the most out of it.
The hard truth is that many general agents lack all the tools and information they need to maximize their potential and do the best possible job for their clients. This can result in real consequences for the people we serve, as policies lapse because no one caught a missed payment, and important life events pass by without review. It’s time for a new look at how technology and data integrity can help fulfill the promise of the advisor relationship, and the agency model itself.
Correcting the bias toward brute force
The insurance industry is not hard-wired for standardization, or efficiency. Part of the problem is our technology; much of the information we rely on about our clients is stored in siloed platforms not sophisticated enough to identify stale or incomplete data, or alert us to discrepancies that might get in the way of sound advice. Add to that, many of the best advisors in the business have made a career out of resisting cookie-cutter approaches to serving their clients, and before you know it we end up with an excess of duplicate and wasted effort.
The most successful agencies have seen that independence and standardization are not mutually exclusive. In fact, developing and staying faithful to standard, centralized approaches to solving common problems is exactly what unleashes the creativity and dedication of a committed advisor. A consistent, agency-led approach to supporting advisors with good client data, knowledge of life events and potential coverage gaps, and shepherding new policies to issue allows advisor to serve more clients, more effectively.
Planning for advisor turnover
Around 90 percent of new life insurance advisors exit the business within their first year.[i] Even advisors who stick it out for longer don’t do so forever — nearly every one of our clients and the policies we write for them will change servicing agents at some point, leaving plenty of opportunities for something vital to fall through the cracks. We can transfer policies to a new advisor, but how do we transfer the months or years of knowledge gained about a client and their priorities, to make that new advisor successful?
Here again the tech-savvy agency plays a vital role. By offering an easy-to-use, low-barrier means for advisors to create, share, and access their notes and interactions with clients, agencies create an invaluable resource to support the transition of clients and policies between agents. This not only supports the advisor and the client during the life of that relationship, but also helps to attract and recruit new advisors, who know for certain the clients they pick up in transition will come with a foundation of continuity and trust.
The chasm of intention and reality
Too many financial professionals fall prey to an unintended but powerful bias toward new sales, often at the expense of servicing the clients they already have. It is a practical reality that as entrepreneurs, advisors writing 100–200 policies a year are naturally going to be focused on the next transaction, not the previous one. But the best advisors also have an intrinsic moral motivation — to be present for their clients when they need them most, and to fulfill the promise of financial peace of mind.
Successful GAs have recognized that with the right tools and technology, advisors do not have to choose between sales and service. Every policy placed for a client has its own unique calendar populated with birthdays, anniversaries, expirations, and conversion dates, all of which can create an opportunity for building trust and ensuring long-term protection. The right information at the right time, provided cost-effectively and automatically to the advisor, can ensure that those signals do not get lost in the noise of new activity.
A moral and financial imperative
Ultimately, it is the responsibility of industry leaders to ensure that ongoing service to clients is properly resourced and financially incentivized just as much as new sales. Those seeking to equip new generations of advisors need to be vigilant and bold about not accepting the status quo. Emerging technology like data governance and AI will only create value to the industry when actively paired with a commitment to translate that value to the client as well. Centralizing and standardizing data integrity, actively planning for advisor attrition, and keeping a long-term view on the client relationship is all within reach; it will take time and investment, but we can be confident that it will garner higher caliber recruits, create better-equipped advisors, and deepen client relationships with longevity and trust.
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Greg Large is the President of Lenox Advisors, and the Executive Chairman of Fieldtech. Greg’s expertise in insurance, financial and wealth management services earned Lenox the Forbes ranking of #1 Financial Security Professional in New York State in 2023 and #2 Financial Security Professional Nationwide for 2022 and 2023.
[i] Investopedia in Becoming a Life Insurance Agent, Mary Hall October 21, 2022.
